Houston-area home market shows resiliency amid oil downturn

For-sale signs are multiplying in many Houston-area neighborhoods, a tangible sign that the ultra-competitive real estate market of the past several years is loosening up as the local economy cools off.

Yet so far this year, home sales are up a hair and one key metric shows it's still a seller's market.

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Still, the market frenzy of years past is gone, said Bill Gilmer, director of the Institute for Regional Forecasting at the University of Houston's C.T. Bauer College of Business.

"All of the speculative craziness is being worked out of this market," he said.

Compared with last year's near-record numbers, single-family home sales have been down most of the past six months.

Sales in March fell among the high- and lower-priced segments but they jumped 8 percent in the $150,000-to-$250,000 range, the Houston Association of Realtors said Wednesday in a monthly report. Buyers closed on 6,001 homes last month, according to the association, which tracks properties sold through the Multiple Listing Service throughout primarily Harris, Fort Bend and Montgomery counties.

The complexity of the market means some areas are booming while others struggle.

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Sales in southwest Katy, for example, were down 10.7 percent in the 12 months that ended in March, according to data from the realty association. In Garden Oaks, a neighborhood closer to town, sales were up 15 percent and inventory has fallen.

Christopher Johns, a real estate agent who works in the far southwest suburbs, said he's not experiencing a "sky-is-falling kind of market," but he has seen prices soften in Cinco Ranch and south Katy.

"I represent buyers, so for me it's great," Johns said.

One of his colleagues who specializes in Houston's urban neighborhoods said sellers are pricing their homes more competitively, but some are still attracting multiple offers.

"The mindset has shifted, but there is still a lot going on in the market," said Irma Jalifi. "I'm quite certain my suburban counterparts might feel a little bit different."

Overall, sales dipped 2.2 percent in March from a year earlier. That also was down from the previous month, which logged an increase of 9.3 percent, according to revised figures from the association. It originally reported a 2.2 percent increase, the first in several months.

The number of homes for sale at the end of March shot up 21 percent to 34,504.

New listings boosted inventory to a 3.6-month supply, up from 2.8 months last year.

The inventory represents the time it would take to sell all the available homes for sale based on recent activity. The general rule of thumb is that a 6-month supply characterizes a balanced market. Anything less than that is considered a seller's market.

Inventory typically rises in the spring.

"We've had some phenomenal weather in Houston," Jalifi said. "It's just that time people are ready to get out. They're looking around."

Buyers are looking for deals, but prices have shown resiliency.

The median price of a single-family home - the figure at which half sold for more and half sold for less - was up 2.4 percent in March to $215,000. That represented a record for March, though it is down from the highs of last spring and summer when high-end sales were driving the market.

Home sales are up 1 percent year to date. How one does in this market depends on who their buyers are. Deanna Dawson, an agent who works in the Sugar Land area, said many of the buyers she's worked with recently don't work in the oil business. "I've had an attorney, an insurance guy, a middle school principal," she said.